360° Coverage: Apple iTunes Radio Up Pandora Down

Apple iTunes Radio Up Pandora Down

iTunes Radio is proving disastrous for Pandora, exactly as many analysts projected. Just as Apple was reporting a great response for their new internet radio streaming service, Pandora suffered a notable drop.

WillPandora be able to recover? The future does not look very bright for Pandora. The company might still be considered the biggest internet radio service in the world, but most likely not for much longer, thanks to Apple’s iTunes Radio, a service that is part of the company’s many new introductions to the market.

The Las Vegas Sun reported that shares fell for Pandora Media Inc. on Monday, just as over 11 million listeners were tuning in to iTunes Radio for the very first time. iTunes Radios is included in the new iPhones as well as the iOS 7 update, both of which received an overwhelmingly positive response from consumers by way of record-breaking sales for the new phones and high adoption rates for the new OS.

It is unclear if Pandora will be able to survive the newly found steep competition that poses a threat unlike anything else the company has ever experienced. Jordan Rohan and Michael Purcell, both Stifel analysts report that Pandora investors has failed to take the threat seriously until they heard of these latest market results. However, the fact that Apple succeeded in getting 11 million users for iTunes Radio, even with no promotion, and that there are tens of millions of Apple customers who have not yet upgraded to iOS 7 did not slip their attention.

Some analysts are still remaining positive about Pandora, calling the ultimate effect unclear, instead of disastrous. There is data that has yet to be reported, such as exactly how long users are actually listing to iTunes Radio, for example. Nevertheless, they are predicting that Apple’s step into the world of streaming radio will cause a reduction of hours spend listening to Pandora by about 10 to 15 percent over the course of four to six months.